Budget 2015: reaction from the sector

Local Government Lawyer looks at the reaction of the Local Government Association and others in the sector to the 2015 Budget.

Local Government Association chair Cllr David Sparks

"This Budget has acknowledged the need for changes to the way public services are funded and delivered and for more of the important decisions to be made closer to the people who use them. But it has not protected funding or delivered the bold approach to English devolution which will be essential to the survival of our libraries, children's centres, parks and local buses in the next few years.

"The adult social care system is currently stretched to breaking point. If older people are to get the quality of care they deserve then funding for care must be protected. Investing money in the NHS while forcing councils to cut their social care budgets is simply a false economy. This hasn't been addressed by the Chancellor today, which makes it all the more vital that it becomes one of the biggest priorities for the next Government.

"Councils have long been calling for reform of out-of-date business rates and for any growth in receipts from this tax to be retained by local government. The announcement of pilots in Greater Manchester, Cheshire East, Cambridgeshire and Peterborough keeping a greater share of this income is a significant step forward, but one which should not just be limited to a couple of areas. All parts of the country should be able to reap the benefits of having a thriving local economy. This should be implemented as soon as possible in a way which ensures areas with fewer businesses do not lose out.

"Central government needs to seize the opportunity presented by the review of business rates to create a more effective local tax where rates and discounts are set locally and councils have much more freedom to support small firms.

"The greater say people in Greater Manchester and now West Yorkshire will have over their local transport, skills provision and welfare policy will save money and improve services.

"Economists, business leaders and councillors all agree that a much bigger and faster approach to devolution for all places – both inside and outside our big cities – is essential for the economy and survival of good quality public services.

"Local areas having autonomy over their local services should no longer be dependent on incremental concessions from Westminster. The future of local services depends on this becoming the default."

"Between the Chancellor's first Budget in 2010 and the end of the next financial year, the money Government gives to councils to provide local services will have fallen by 40%. Local authorities have played a huge role in balancing the country's books, but more of the same cannot be an option in the next five years.

"The next Government must protect funding for local services, tackle the adult social care crisis and set out a new settlement for England which devolves decisions about infrastructure and skills as well as health and social care, down to local areas.

"Motorists who rely on good roads, young families who use local children's centres and older people who depend on care will all feel the repercussions of a failure to fundamentally reform how their services are provided and paid for."

Jonathan Carr-West, chief executive of think tank LGiU

“This budget offers further evidence of a welcome momentum towards devolution and takes us one step nearer to a localist tipping point from which future governments will be unable to row back. We are particularly pleased to see the announcement that Greater Manchester, Cheshire East and Cambridgeshire will be able to keep 100% of business rate growth, something we have long called for and which our research shows that nearly 80% of councils want.

“The devolution deals we have seen so far are the result of a dynamic treasury negotiating directly with local authorities (often on a cross party basis): the first time in a generation this has happened. We urge the chancellor to make good on his promise of an open door to negotiate similar deals for other councils. But if this door is open then the onus is on local government to walk through it.”

Rob Beiley, Housing and Regeneration partner at law firm Trowers & Hamlins

"It's great to see that the Government has committed in the Budget to implementing one of the key recommendations in the Elphicke-House Report – the establishment of a new Housing Finance Institute. This move reinforces what was outlined in the Report earlier this year about local authorities becoming 'housing delivery enablers' and demonstrates the key role that local government will be expected to play in increasing housing supply."

Janet Askew, President of the Royal Town Planning Institute

“We welcome in principle new measures to boost housing and regeneration but will need to see the detail of what is proposed and how they are to be delivered. It is crucial that we begin to invest again in local planning for a growing and sustainable economy. The National Audit Office revealed a huge 46% reduction in spending on planning and development services. This highlights very clearly the need to channel more resources into the planning system at local authority level.”

Cllr David Simmonds, Chairman of the Local Government Association's Children and Young People's Board

"We have long called for more money to support children and young people's mental health services and we are pleased to see that there are plans to invest additional funding which could improve much needed access to these vital services for thousands more young people.

"As many as one in 10 children between the ages of one and 15 will suffer from a mental health disorder and we desperately need to see the whole system properly funded, resourced and joined up to ensure children and young people receive support when they need it.

"We have already been working with central government on the taskforce to improve mental health services and are keen to continue working with any new Government to ensure this is kept as a high priority. It is vital that the urgent improvements which have been identified are addressed and that the system is joined up to help tackle the challenges faced each day by children, young people and their parents who need to access mental health support."

Paul Dossett, Head of Local Government at Grant Thornton UK LLP

"With less than two weeks to go before Parliament is dissolved and less than two months before the public pass their judgement at the ballot box, this Budget fired the starting gun on what will be the most difficult to predict general election in a generation.

"The Chancellor confirmed the announcement made earlier this week by Danny Alexander of a review of the business rates system in England. The review will examine the sustainability of the current system – which was introduced nearly 30 years ago – and how business rate retention by councils can incentivise growth. The Chancellor also announced agreement for the Greater Manchester Combined Authority and Cheshire East to retain 100% of business rate growth from next month, to add to the Cambridgeshire pilot announced earlier this week.

"We welcome the planned business rates review and hope that it will be radical, considering how business rates can better reflect the modern economy – not necessarily based on property values - as well as incentivising cities and local authorities to support and not hinder business growth. This should include full devolution to local authorities to provide them with the freedom to generate revenue to invest in local services and assets, enabling local decision making and accountability, but with appropriate safeguards to support more deprived localities and to avoid unnecessary tax competition.

"In his speech the Chancellor stated that the north of England is growing faster than the south. The most recent Grant Thornton/ICAEW Business Confidence Monitor showed that, unlike the rest of the UK, business confidence held steady at the start of 2015 in Northern England and Yorkshire and Humber, perhaps buoyed by stronger export performance than the rest of the UK. These encouraging signs are a further demonstration of the importance of devolution to city regions and investment in the infrastructure of the Northern Powerhouse.

"The Chancellor confirmed the recent NHS devolution announcement for the Greater Manchester Combined Authority and plans for an elected mayor, which he called the most exciting development in civic leadership for a generation. He also confirmed the devolution announcement for the West Yorkshire Combined Authority, with additional powers relating to skills, transport and business support.

"We welcome further commitments to empowering city regions, particularly on skills and transport; such as investment in coast-to-coast transport connectivity in the North; and to look at ways of expanding international flights from regional airports such as Manchester.

"The Chancellor confirmed that the administration costs of central government had fallen by 40% during the lifetime of this parliament. Some pre-election coverage suggested the Chancellor may announce modifications to the depth of cuts planned during the next parliament. However, he stuck to the additional £30 bn savings previously announced. Of this, £13 bn will be met by government departments (with £12 bn from welfare and £5 bn from tax avoidance/evasion) but it remains unclear how much of this will be borne by local government. However, the key message today on public finances is that a surplus is forecast during 2019/20 and that public spending will then grow in line with growth in the economy. This offers a glimmer of light at the end of the tunnel for public services.

"On a more positive note, the Chancellor confirmed an additional £1.25 bn for mental health services in England, trailed by Nick Clegg at the recent Liberal Democrats spring conference. More broadly, many in the sector will be disappointed that the LGA's hoped for ring-fencing of social care budgets, to protect them from further cuts, did not feature in the Chancellor's statement, although commitments are given in the Budget Book to explore further integration of health and social care budgets at a local level, going beyond the Better Care Fund.

"A final word of caution. Given the unpredictability of the outcome of May's general election, it is likely that there will be an emergency budget following the formation of the next Government - particularly if there is a new Chancellor in place - which could see today's Budget plans amended or overturned."

Ian Graham, Housing and Regeneration partner at law firm Trowers & Hamlins

"The Chancellor today announced that the Government will consider ways of supporting long-term investment in private rented accommodation for homeless families. This is very welcome. At present many local authorities face having to house families in accommodation that is some distance away and/or substandard. The cost is high and is paid to a large number of private landlords.

"The provision of institutionally supported, quality, rented accommodation ought to produce a more economic solution, as well as one that enables homeless families to remain in areas where they have put down roots. It is likely that some public sector underwriting of the rent will be required, given uncertainty as to the future levels of state support for such families. That may well be seen as a price worth paying."

CIH interim chief executive Gavin Smart

"We are in the grip of a severe housing crisis. For decades we have failed to build enough new homes to keep up with our growing population, and the gap between the haves and have nots is getting bigger all the time. For many people, affording a decent, suitable home either to rent or buy is a distant dream.

"While the help to buy ISA may help some first time buyers to overcome barriers to home ownership, it fails to address the fundamental problem – that we are simply not building enough homes. Stimulating demand without also addressing the issue of supply runs the risk of further fuelling house price rises.

"We need strong political leadership to rise to the challenge of fixing our broken housing system. This is why we are asking all political parties to commit to solving the housing crisis within a generation."

David Orr, chief executive at the National Housing Federation

“[The Help to Buy ISA] is another short-term initiative for first-time buyers, not a budget to end the housing crisis.

“We are pleased that the government recognises how difficult it is to get on the housing ladder.  But the housing crisis is a long-term problem that calls for a long-term solution and one that affects more than just prospective buyers.

“The Help to Buy ISA will help people scrape together deposits but it fails to address the root cause of unaffordability – the chronic undersupply of homes, which has driven up prices. It also does very little for those languishing on social housing waiting lists, in temporary accommodation and the homeless – who are victims of an undersupply of affordable housing.

“With just 50 days until the election, we need politicians to pull their heads out of the sand and commit to yesterday’s Homes for Britain rally’s call for a long-term plan within a year of entering government which will end the housing crisis within a generation.”